UK prices leap as average London home hits £531,000

UK house prices increased by 6.1% in the year to September 2015 with London and the South once again leading the charge.

This compares to UK growth of 5.5% in the year to August, taking the average UK property price to £286,000, according to latest house price index from the Office for National Statistics.

The East and South East saw the largest annual increases, up 8.4% and 7.4% respectively.

London prices increased by 7.2% over the year to September 2015, up from 5.4% in the year to August 2015.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said the housing market is picking up momentum again. 

“As we head towards the end of the year, the mortgage market is set to support this growth. 

“With lenders keeping an eye on meeting their year-end targets, there are some very competitive deals to tempt borrowers.”

Harris said the average house price in London is now a daunting £531,000. “Even if buyers can save up the deposit required, their income may simply not support such a large mortgage, making it very difficult to buy on your own.”

Life is also tough for first-time buyers outside London, where they pay on average £216,000. “That still means saving at least £11,000 for a deposit, plus moving costs, and a salary of around £50,000."

Jeremy Duncombe, director, Legal & General Mortgage Club, expected house prices to climb further in the final quarter of the year.

“The scale of the disparity between house prices in different regions of the country illustrates the need to not only build more homes, but to also ensure that more properties are built of the right size and in the right places.

"Ultimately, we need to bring supply in line with demand.”